HONG KONG — Chinese e-commerce powerhouse JD.com reported second quarter revenue that grew 43.6 percent year over year to 93.2 billion renminbi, or $13.7 billion, outstripping management’s most optimistic guidance by nearly 5 percentage points. During the three months ended June 30, the company swung back to loss after notching a gain in the first quarter.
Monday’s numbers were part of a strong streak of topline growth: During the company’s last earnings call, JD.com chief financial officer Sidney Huang had advised that growth would be between 35 to 39 percent year on year. The rise in revenue was largely in line with the increase in gross merchandise value, which was up 46 percent to 234.8 billion renminbi, or $34.6 billion.
Although the company registered its first quarterly profit in May, it swung back into the red, recording a 287 million renminbi, or $42.3 million, loss in the three months.
Looking out to the third quarter, chief financial officer Sidney Huang said they believed sales growth would land somewhere between 36 to 40 percent year-over-year.
Apparel and luxury is a fast-growing part of that business and has been a key strategic focus for JD.com as of last year. It recently invested $397 million into luxury platform Farfetch. In addition to drawing Swarovski, Zenith, Mammut, Juicy Couture and Armani to the site, JD.com has also launched its luxury “white-glove” delivery experience, which has been designed to offer a comprehensive and end-to-end premium experience for online shopping.
“Our apparel category has reached now a very healthy state, which is what we had hoped for, and we are expecting a very healthy growth trajectory from now on,” said Richard Liu, chairman and chief executive officer of JD.com.
Liu said the company was working on launching its luxury platform, putting it directly in competition with Alibaba’s just unveiled luxury pavilion, although timeline was vague.
He said its own site would not conflict with its Farfetch investment as the British company puts a large number of boutique stores around the world in one destination, and so the product selection tends to be fairly unique and not available in China. On the other hand, JD.com’s own luxury platform would be “focused on luxury products available in official channels in China, the Chinese subsidiaries of the global luxury brands.”
Management also guided that they would not rule out taking further strategic stakes in other companies if they saw an opportunity and they would also explore private label initiatives.
The company said it fulfilled 591.2 million orders, an increase of 41 percent, with mobile accounting for approximately 80 percent, a big uptick compared to the 42 percent in the same period last year.